1. Home > >

What are the costs of forex trading

Before trad forexcashbackprofitcalculatorg Forex, investors need to choose a suitable foreign exchange broker, but in the face of the various types of brokers, how exactly should investors choose? Th cashback forex profit calculator article will provide you with a detailed analysis of the cost of foreign exchange trading, which can be used as a detailed reference before trading in the foreign exchange cashbackforexpipcalculator, the cost of foreign exchange trading for traders mainly comes from three aspects: cashback forex, cashbackforexprofitcalculator and commission spread is the cost that traders need to pay each time they make a single, is the trader The first consideration in choosing a foreign exchange dealer, directly affecting the traders capital spreads are divided into floating spreads and fixed spreads, each foreign exchange dealer offers different spreads, traders need to combine their own situation carefully choose slippage: when the actual transaction price is not the same as the starting offer, it will produce slippage (① no slippage; ② positive slippage; ③ negative slippage) commission: we often say that the transaction The handling fee is the foreign exchange broker will be charged for each transaction is converted into spreads, regardless of the currency of the transaction, the handling fee will be converted into the currency of the spread For example: a standard lot (100,000 U.S. dollars), the point value of each point is 10 U.S. dollars, charged a fixed spread of 3 points, that is, charged 30 U.S. dollars per hand That is: the cost of foreign exchange transactions = spread + slippage + handling fee So how do we measure this transaction The spread is divided into fixed spreads and floating spreads floating spreads, which means that the broker (currently the regular platform is basically floating spreads) itself does not participate in the customers transactions, but directly to the customers single to the international market to trade, they only charge the cost of delivery, the cost of services, just to provide customers with a trading platform so that customers no matter what single, as long as the international market at the time someone is willing to take. As long as the international market at the time someone is willing to take, it will immediately deal, there will be no human intervention, but also casual people do ultra-short term and their spread is not fixed, when the market transaction is very light, because people do not have much interest in trading, then BID/ASK (spread) may be very different, but this is the real market price some of the companys spread is fixed, but their offer is what they give, not the real price on the international foreign exchange market at the time, if when the customer makes a lot of money, because the customer is trading directly with them, then the customer makes a loss means they lose money, so that they may go bankrupt, and a bankruptcy, the customers funds are not protected Ruifu is such an example is also because of this, so it is not easy to deal with the customers favorable single Or have a loss is still not flat, so there will be human intervention, but also not allowed to pick up the scalp, because customers who use the platform to see the difference in price to gain profits, in fact, is bound to lead to market maker losses, their spread is fixed, but generally in order to prevent risk, the spread will be relatively large, if the market maker system of the company spread is very small, that they are to lose money and out of the data The spread will likewise be very large slippage slippage may be network delays, there may be violent fluctuations in the market at the time, there may also be irregular brokers deliberately do the trick, any platform will have this problem for most brokers, slippage will not exceed 1 point, but even so, investors will suffer greater capital losses slippage phenomenon is particularly common in community trading, the signal often has to cross several The signals often have to cross several servers to reach different clients, thus exacerbating the slippage situation Investors need to choose a broker with low slippage to trade, so as to greatly avoid the loss of capital due to slippage In addition, slippage is most often seen in market orders Market orders can both open positions and close out existing positions, so slippage can occur both in and out of the market Another point is that slippage is more likely to occur in lightly traded markets The market is more susceptible to market volatility (some people with financial strength will choose to choose a less liquid species in the Asian market, to do some single artificial price manipulation for profit), resulting in the expansion of slippage if the opening hours of the European and American markets to trade foreign exchange, then most of the currency pairs are very full of liquidity, slippage is less commission foreign exchange trading process there is an ECN model, this model can give Investors can provide excellent trade execution and favorable spreads, ECN on the cost of two parts, one is the commission, the proportion is generally very low, the other part is the spread in accordance with the rules of the game designed by NASDAQ for market makers, allowing market makers in the bid and offer a certain spread, the market maker can execute transactions for customers, from which to earn commission as investors, naturally hope that The lower the handling fee, the better